GraceKennedy’s investment subsidiary is temporarily shut out of securities trading, an agreement reached during the sale of First Global Financial Services to Proven Investments Limited, but may re-enter the market in less than a year, the Financial Gleaner understands.
GraceKennedy Limited created a new firm in the aftermath of the sale, GK Capital, but that entity is currently focused on dealmaking and investment advisory services.
FGFS was sold to Proven for $3 billion last year. On Wednesday, GraceKennedy Group CEO Don Wehby declined comment when asked about the restrictions, saying the company was bound by a confidentiality agreement with Proven.
GK Capital operates from 58 Hope Road in Kingston. It is understood that the company was restricted from securities dealings between April 2014 and April 2016.
The company, otherwise, says it guides clients’ participation in the equity markets locally and abroad, and is focused on private equity and venture capital projects, as well as traditional investment banking services, including the brokering of IPOs, mergers and acquisitions, and debt capital fundraising. Most recently, GK Capital was named among consortium partners shortlisted to bid for the Norman Manley International Airport.
“The model at GK Capital is designed to help companies to arrange, structure and issue innovative securities or create attractive investment vehicles and then partner with the wealth managers in the industry who assist us with distribution by offering the products to their clients,” said Wehby.
He said the company has been designing and executing original solutions for companies in need of capital, rather than offering retail products.
GK Capital is run by Steven Whittingham, who was also the head of FGFS at the time of its disposal last year. Whittingham sits on the company’s board with Wehby as chairman, and directors Frank James, Courtney Campbell, Dennis Chung and, most recently, Angella Rainford.
Wehby says the company is gaining traction in the structuring of financing for companies which might not yet be ready to list on the stock exchange, but need capital for expansion.
“Recognising that not all companies that reach out to GK Capital have the appropriate internal and corporate governance structures in place to accept equity funding, GK Capital also has the flexibility to facilitate alternative debt instruments, for example, leases or other unsecured loans to help clients grow their businesses and prepare for a future equity investment,” he said.
He described the company’s execution of last year’s fundraising for Jamaica Energy Partners as “one of the largest private bond offerings for the year … raising approximately US$60 million in a transaction that was almost two times oversubscribed.”
GK Capital also arranged the listing by introduction of Sterling Investments Limited on the Jamaica Stock Exchange.
“At GK Capital, we have proven that we have the capacity and ability to originate securities of significant benefit to the market. Our focus continues to be origination, so while we will not offer unit trust products from the retail perspective, we will partner with unit trust companies to provide the securities needed for successful funds,” he responded when asked about the company’s plans for the unit trust market.
Otherwise, the company is also assessing venture capital opportunities in the Jamaican market and has a number of transactions in the pipeline, “some of which will become public in the near future,” Wehby said.